Readers' comments

So two posts below, you were chasing a phantom menace in which necessary caution is due because apparently there is a belief - and nothing more - that deficits are the cause of uncertainty. This belief seems to hinge, if it's hinged at all, on gut feelings about what seems to be right, an ideology of "que sera, sera" and the idea that debt at some level seems to impede growth. The US is nowhere near that debt level, which has only occurred in the immediate rundown after WWII and it's only a correlation anyway, but based on those generalities you seem to believe that the uncertainty preventing investment is the deficit.

And then today you post more evidence that the uncertainty is due to the lousy freaking economy and the outlook that demand will be contracted as the government shrinks spending. In the US, projections are for as many as 900,000 jobs cut as states cut to balance their budgets - as they must. Who in any rational business is going to invest when the government is clearly signaling that it doesn't want the economy to improve for the foreseeable future.

I believe your magazine ran a leader about the return of Hoover.

Britain, of course, has an option the US doesn't: it isn't in the Euro and isn't a reserve currency and it can debase its currency to spur export - if debasement doesn't make debts too expensive in another currency. So is the Tory government leading with the one barrel of at least the impression of extremely sharp cuts with the second, debasement, to come? You spoke to this in your post about inflation protected bonds.

Given the ham-handed Eurozone response to it's difficulties, why wouldn't people sell riskier assets and buy trusted government bonds ? I'd be worried if they didn't; markets that ignore bad news on the way up or good news on the way down have gone irrational.